Implications for Conveyancers

With emancipation comes opportunity for conveyancers, but also responsibility and, potentially, liability. Far more than in the past, the content of title sheets will be determined by the decisions of solicitors. I now consider the constraints within which these decisions are likely to be made.

(1) Responsibility

An error made on registration must be undone, if indeed it can be undone at all, by rectification. These two gateways to the Register, however, are no longer policed with equal vigilance; for whereas rectification remains the sole province of the Keeper, as before, many decisions as to registration are now delegated to conveyancers. In practice this will often mean that registration is easy and rectification hard, a structural imbalance which makes it difficult to correct mistakes made at the time of registration. That is something of which all conveyancers will need to be aware.

Take the case, mentioned above,³⁸ of prescriptive servitudes. Suppose that, on the basis of affidavits as to possession and assurances from the seller, the benefit of a prescriptive servitude is claimed in the application for registration of the buyer’s title. Suppose further that in accepting the application, the Keeper enters the servitude on the A section of the title sheet, and makes a matching entry on the D section of the title sheet of the burdened property, informing its owner at the same time.³⁹ If the latter agrees that the servitude exists, then well and good. But if he disputes the point, his position is both difficult and unfair. Without either his consent or, initially, even his knowledge, the burden of a servitude has been added to his title sheet. Yet in order to have it removed, he must persuade the Keeper to rectify, and that can only occur, under the 2012 Act, if the alleged inaccuracy is “manifest,"⁴⁰ or in other words “perfectly clear, or

38 See B(4) above.

39 My understanding is that the Keeper will indeed normally make a matching entry in the title sheet of the burdened property (if there is one), though whether this is regarded as registration or as rectification is unclear. In relation to the former, there are broad powers to make such changes “as are necessary or expedient” to the title sheet record (i.e. to other title sheets): see 2012 Act s 31(2)(b). In relation to the latter, there is the potential difficulty that rectification is only permissible where the inaccuracy (i.e.

the failure of the servitude to appear on the burdened title sheet) is “manifest” (i.e. the claimed servitude plainly exists): see 2012 Act s 80(1).

40 2012 Act s 80(1).

not reasonably disputable.”⁴¹ A servitude which is claimed by one party and denied by the other is unlikely to meet this high standard. Faced with competing assertions the Keeper will, quite properly, refuse to rectify. The burdened proprietor must then either put up with the servitude or resort to litigation to prove (if he can) its non-existence.

The position is much the same if the mistake, or alleged mistake, is the omission of a real burden on first registration. In order to have the burden restored, the benefited proprietor must satisfy the Keeper that its existence and enforceability are indisputable and hence that the inaccuracy (i.e. the burden’s omission from the title sheet of the burdened property) is manifest. He is not likely to succeed.

What is more, with the passage of time, even this slim prospect of correction will often disappear. This is because, under the 2012 Act, mistakes made on the Register (so-called “Register errors”)⁴² are typically cured on the property being disponed to an acquirer in good faith; and unlike the Midas touch of the 1979 Act,⁴³ the cure is for good, so that the Register ceases to be inaccurate and cannot thereafter be rectified. So, for example, a real burden omitted by an applicant for first registration would be extinguished as soon as the property is transferred to someone else, leaving the benefited proprietor with a claim for compensation against the Keeper but no claim of any sort against the transferee.⁴⁴ More seriously, if the mistake was as to the proprietor’s actual title – if, in other words, the certification of title on the application form was incorrect,⁴⁵ so that neither the granter of the disposition nor therefore the grantee, now registered as proprietor, was owner of the property – that mistake too is cured by transmission to a good-faith acquirer provided that the disponer-proprietor had possessed the property for a year.⁴⁶ Of the examples given earlier, it is only prescriptive servitudes which would not be cured but would remain as an inaccuracy on the Register.⁴⁷

41 Scottish Law Commission, Report on Land Registration (n 22) para 18.17.

42 For “Register errors," see Scottish Law Commission, Report on Land Registration (n 22) paras 17.28-17.32.

43 1979 Act s 3(1)(a). For the use of the term “Midas touch," see Scottish Law Commission, Report on Land Registration (n 22) para 3.11.

44 2012 Act ss 91, 94.

45 See, for this certification of title, B(2) above.

46 2012 Act s 86.

47 Scottish Law Commission, Report on Land Registration (n 22) para 23.33. The validity of the servitude would, however, be covered by the Keeper’s warranty under s 73.

(2) Liability

As well as the consequences of mistake for the title, conveyancers are likely to be mindful of the possible consequences for themselves. To responsibility, therefore, must be added liability.

Section 111 of the 2012 Act provides that, in making an application for registration on a client’s behalf, a solicitor “must take reasonable care to ensure that the Keeper does not inadvertently make the register inaccurate as a result of a change made in consequence of the application.”⁴⁸ In other words, conveyancers must watch what they say in an application for registration. Liability, however, is not strict; the duty is one of reasonable care. Nor will a conveyancer be judged by the standards of best practice, section 111 not being intended to “raise the standard of what is required of a conveyancer.”⁴⁹ But if a conveyancer falls short of normal professional standards, if this causes an inaccuracy on the Register, and if the Keeper suffers loss as a result, there is liability to the Keeper in damages.⁵⁰ The Keeper would suffer loss only if she had to make a compensatory payment, and this could occur either because the inaccuracy came to be rectified (payment being due to the affected proprietor)⁵¹ or because, due to the provisions protecting good-faith acquirers,⁵² the error had ceased to be an inaccuracy (payment being due to the former right-holder).⁵³

There can also be liability to the conveyancer’s client. As section 111 imposes a duty of care on the applicant as well as on the applicant’s solicitor, the Keeper might chose to pursue the applicant, leaving the applicant to make a claim in professional negligence against the solicitor⁵⁴. The same might happen in respect of the various warranties which the applicant grants by the mere act of applying for registration. As well as the certification of title, already mentioned,⁵⁵ the applicant is required to certify both “that this application complies with the general application conditions in section 22, and the particular application conditions mentioned in section

48 2012 Act s 111(3), (4).

49 Scottish Law Commission, Report on Land Registration (n 22) para 12.103.

50 For details, see 2012 Act s 111(5), (6).

51 Ibid s 73. This is the Keeper’s warranty as to title.

52 Ibid ss 86 and 91, discussed at D(1) above.

53 Ibid ss 94, 95.

54 The leading expert in this field is of course none other than Robert Rennie himself.

Apart from countless opinions on the subject and many court appearances as an expert witness, he is also author of Opinions on Professional Negligence in Conveyancing (2004).

55 At B(2) above.

21(2)," and also “that the information given in this form and the answers to the above questions are complete and correct to the best of my knowledge and belief.”⁵⁶ If, as seems possible from the wording, the first two of these warranties are absolute in nature, the duty of the applicant to the Keeper is more extensive than the duty of the solicitor to the applicant, which exonerates the solicitor in some cases but leaves the applicant exposed.

Finally, a breach of section 111 blocks a claim for compensation under the Keeper’s warranty,⁵⁷ so that the client’s loss might be a failure of recovery from the Keeper rather than a requirement to pay the Keeper damages;

here again, the loss is likely to be recoverable from the conveyancer on the ground of professional negligence.

The risks should not, however, be exaggerated. Mistakes in respect of the application will be relatively uncommon, negligent mistakes less common still. A conveyancer who, in the exercise of sound professional judgment in the light of the law and the evidence, concludes that, say, a prescriptive servitude exists or a real burden is extinguished is not liable merely because a court later decides that he was wrong. Further, the inertia of the Register means that mistakes once entered there are unlikely to be picked up later, far less corrected. In short, completion of an application form for registration is not an especially hazardous activity. The liability, in any event, is not new. A common-law equivalent of section 111 may already have existed,⁵⁸ while “carelessness” in carrying out the conveyancing blocked a claim for 1979 Act indemnity.⁵⁹ What is new, however, is the reduced scrutiny by the Keeper and hence the greater opportunity for things to go wrong; and where they do the very presence of section 111 may make an attempt at recovery more likely.

(3) Opportunity

Conveyancers, no doubt, are well aware both of the responsibility involved in preparing applications for registration and also of their potential liability. Neither, it is to be hoped, will prevent them from making use of their new-found freedoms. For, whatever one thinks of “tell me don’t show me” – and there are strong reasons for questioning its use, as I explain

56 Application form p 7.

57 2012 Act s 78(c).

58 Scottish Law Commission, Report on Land Registration (n 22) para 12.102. Not everyone would agree with this assessment.

59 1979 Act ss 12(3)(n) 13(4).

below⁶⁰ – it presents conveyancers with the opportunity to reclaim the very role that Robert Rennie feared had been lost for ever. After several decades of the nanny state, nanny has packed her bags and gone home. It is now for conveyancers to ply their trade once more, to “take a view” on titles, and to apply with a cool eye and a keen judgment the principles of the law of property. It will be a pity if they turn out to be as cautious and risk-averse as the officials at Meadowbank House.